Europe midday: Shares head south as early gains evaporate
European shares turned south at midday on Wednesday as bank-driven gains in the morning were lost.
The pan-European Stoxx 600 index was down 0.3% with the UK FTSE 100, French CAC 40 and German Dax followed suit. US Dow Jones futures were 63 points lower, from a rise of 22 points earlier.
Investors had taken some heart from plans in Germany and the UK’s four nations to ease Covid-19 restrictions in time for Christmas. French President Emmanuel Macron also announced a gradual relaxation to France’s lockdown, but bars and restaurants will have to stay closed until January 20.
They were also eyeing a UK spending review from Finance Minister Rishi Sunak’s later on Wednesday where he is expected to outline further measures to support the economy.
Bank stocks turned sour despite Yves Mersch, vice-chair of the European Central Bank’s supervisory board, saying eurozone banks may be allowed to resume dividend payouts in 2021 if their balance sheets were strong enough.
ABN Amro, Barclays, Lloyds and Commerzbank were all weaker at midday.
In equity news, Virgin Money fell after the financial services provider reported a 77% slump in annual profit as it took a £501m impairment charge against an expected surge in bad loans.
Shares in Norwegian real estate firm Entra fell after it rejected a proposed takeover by Sweden’s Castellum. It was the second time in two days that the Oslo-listed firm rejected a Swedish suitor after spurning a NOR 30bnbid from real estate firm SBB on Tuesday.
Defence company Babcock International slid as it reported a decline in full-year profit and revenue as costs rose due to the Covid-19 pandemic.
GKN owner Melrose rallied after saying it was trading at the top of board expectations, although it also struck a cautious note about the outlook. Aerospace sales fell 37% in the four months to the end of October but the automotive and metallurgy business picked up with an improving trend. Nortek Air Management revenue rose 13%.
United Utilities rose as it lifted its interim dividend despite posting a drop in profit, while animal genetics company Genus gained after saying it is likely to perform ahead of its previous profit growth expectations for the financial year 2021.
Shares in animal genetics company Genus topped the gainers as the company said momentum seen at the end of the previous trading year had carried over into the current one.
Industrial flow control equipment maker Rotork turned flat as it said 2020 adjusted operating profit is set to be at or slightly above, the top end of the range of current market expectations.
(Michele Maatouk contributed to this report)